Macy’s Releases Mixed Results into a Fierce Headwind

By Avi Salzman

Macy’s (M) beat earnings expectations today, but its projections for the all-important holiday quarter fell short of analysts’ estimates. Even companies that release relatively positive news today could see their shares fall, as the market is tumbling early.

Macy’s shares fell about 1% in early trading even after it beat earnings expectations and raised is full-year guidance. Macy’s posted 36 cents of EPS, 7 cents ahead of the Street. Same-store sales rose 3.7%, in line with the company’s trend in the first half of the year. Macy’s raised its full-year EPS guidance by 5 cents to $3.35-$3.40, versus analysts’ expectations for $3.40.

But Macy’s fourth quarter earnings range was disappointing: the company expects EPS of $1.94-$1.99, against expectations for $2.05. Nomura analyst Paul Lejuez thinks the company’s guidance is probably conservative.

“We still believe that there is additional upside to this guidance. Mgmt reiterated its comp estimate of positive 4.2% for 4Q. Inventory was up 0.7% over last year, showing that the company does not have an overhang of cold weather goods.”

Sales should keep growing despite the impact of Hurricane sandy, said Chairman and CEO Terry Lundgren.

“We have confidence in our ability to continue to grow sales and earnings in the fourth quarter, even taking into account a recovery from Hurricane Sandy that will cause stress to consumers and our employees in the Northeast and Mid-Atlantic regions.”

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